All Forum Posts by: Matt Rauer

@Shawn M.

Congrats on closing on a new place! That’s great that you are using this strategy. We have 3 kids and my oldest is 4, so definitely a similar situation.

Do you mind me asking how much the MFR go for that you are purchasing? The reason I ask is that duplexes go for ~$275k, triplex ~$350-375k and quadplex ~$425-450k around here and they all rarely hit the 1% rule. 1bd goes $900-1k/mo, 2bd goes $1,300/mo

Even with owner occupied rates and down payment requirements, I'll need to get probably $30k or so for down payment and closing costs for each MFR. That would take a while to get that down payment for the next house.

That’s where my confusion lies, how can I accelerate my 2nd and 3rd property purchases? Everything seems like it will take 6+ years to get to 3 properties, and I’d like to get them in less than 4-5 years.

Hi All,

I've been on here for about 2 years now. Initially we were ready to jump in, but then we had a baby so we decided to put our REI dream on hold for a while. Well, now that time has come and we are ready to get started.

Our background:

wife is in medical field and I’m an engineer. I used to work on cars in HS and college and I house hacked my first house I bought with a friend. We had roommates paying our mortgage and we did the roof, finished the basement, and did a full bathroom remodel while living there. My friend bought me out of the house and I built a house with my wife.

Our goal statement:

Have 10 buildings (60/40 or 70/30 mix of small MFH/SFH) in 10-15 years. We'd like to have $4k-$6k monthly cash flow (after debt and expenses), and >$10k/month cash flow (after expenses) once debt is paid, for our retirement.

Our current situation:

We have around $25k saved and have a house that we built 2.5 years ago. The house is probably worth around $350-360k and we owe around $275k.

It seems to me that once you get 4 or 5 properties that are cash flowing, very quickly can you save enough funds for the next property, snowball effect. However, the thing that is stumping me is how do you quickly get your first 4 or 5 properties? I know there is BRRRR, but are there any other strategies to do this?

Our current house LTV is just under 80% so a HELOC or cash out refinance won't help much. We do have a family member that may be interested in being the money partner while we do everything else. I just need to convince him that this investment would do better than the stock market or REITs.

One thought we’ve had was to move into a MFH and house hack, while renting our current home out. Do this for 1-2 years, find another MFH and rinse/repeat. Thoughts on this strategy?

We do have young kids, but I feel that the quote “live like no one else, so that you can live like no one else” (or however it’s worded) really applies here. Moving a bunch over the next 5 years would be less than ideal, but if it gets us our first 4 properties in that time frame, it could help accelerate our portfolio.

Thanks in advance for your help!

Matt

@Jesse Dickens

Found it.

https://www.biggerpockets.com/forums/49/topics/329076-use-heloc-to-paydown-mortgage-fast

@Jesse Dickens

This sounds like one of those black magic things where a HELOC magically pays off your mortgage in 5 years!!

Don't believe the hype. All it does is force you to make extra payments, but with the risk of a variable interest rate on your HELOC and the fact that they could call it due at anytime. I don't find it to be worth the risk when you could just pay extra when you are sure you have it that month.

There’s another thread talking about this that has 100+ posts and started a couple years ago but had posts recently. A pretty funny thread actually.

@Chris Erik Roy and others that provided sound reasoning to why amortization and HELOCs are nothing special and paying extra on your mortgage is what makes it “special” Thanks for this thread. I’ve read every post and while I didn’t open the spreadsheets, I did learn something. Even on a great website like BP, you’ve got to be careful what you read. Always check, and double check anything that sounds too good to be true. It usually is. So thanks again for making sure others on BP don’t fall for the scam of these HELOC YouTube videos.

@Megan Phillips When is this?

@Mike Schell Welcome to BP Mike. I'm also from the Burlington area and listening to the podcasts. House hacking is a great way to get into it. I house hacked my way in a SFH to start, with roommates and it worked out really well for me. Good luck!

Tyler Kennedy thanks for the thread. Glad to read all the responses and hear this. I'm new but would invest in buy and hold properties that have positive cash flow.

@Jassem A. Ahh ok, I understand now. Thanks for the explanation Jassem.

@Brian C. Brian, I heard from someone about posting a craiglist add for rentals of the units in the building (before you put an offer down), and see how much traffic you get.  My friend did that and received over 60 responses in under 5 days. A cheap/easy way to see real demand.

Needless to say, he put an offer and has been very happy with his investment.